Intellectually Bankrupt

Big lenders got their consumer bankruptcy bill. Will it deprive them of corporate business?
By Daniel Gross
Posted Friday, July 1, 2005, at 1:40 PM PT

Wouldn't it be ironic if the giant financial services companies, whose trade group gleefully hailed the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (which President Bush signed with equal glee in April), found that the tough bill might deprive them of potential corporate business?

A study by Robert Lawless of the University of Nevada at Las Vegas and Harvard Law School bankruptcy maven Elizabeth Warren argues that the government vastly underestimated the number of personal bankruptcy filings that were due to small-business failures. Warren, co-author of The Two-Income Trap, was an avowed and stalwart foe of the bill, and she hasn't given up the fight. The study was backed not by a left-leaning advocacy group, but by the Ewing Marion Kauffman Foundation, a champion of entrepreneurship. The report can be seen in brief here and in full here, and it is well worth reading.